NZD/CAD traded higher yesterday but hit resistance near the 20-EMA on the 4-hour chart, slightly below 0.8610, which is the lower end of the sideways range that was containing most of the price action from January 3rd until the 28th. Today, the rate retreated somewhat. Bearing in mind that the pair continues to trade below the lower bound of the range, we would consider the short-term outlook to be cautiously bearish for now.
If the bears are willing to stay behind the steering wheel, we would expect them to target again the lows of Friday and yesterday, at around the 0.8545 territory. They may decide to take a short break after testing that zone, thereby allowing another corrective rebound. That said, if they regain control from below the lower bound of the aforementioned range, we would expect the forthcoming negative wave to result in the break of the 0.8545 hurdle, something that may open the way towards the 0.8515 zone, which provided decent support between November 25th and 29th.
Taking a look at our short-term oscillators, we see that the RSI turned down and just dipped back below its 50 line, while the MACD, although above its trigger line, shows signs of topping slightly below zero. Both indicators suggest that the rate has started picking up downside speed again and support the notion for some further near-term declines.
In order to abandon the bearish case and turn back neutral, we would like to see a recovery above 0.8625. Such a move may confirm the rate’s return within the pre-discussed sideways path and may allow advances towards 0.8658. Another break, above 0.8658, could pave the way towards the upper end of the range, at around 0.8680.
Disclaimer:
The content we produce does not constitute investment advice or investment recommendation (should not be considered as such) and does not in any way constitute an invitation to acquire any financial instrument or product. The Group of Companies of JFD, its affiliates, agents, directors, officers or employees are not liable for any damages that may be caused by individual comments or statements by JFD analysts and assumes no liability with respect to the completeness and correctness of the content presented. The investor is solely responsible for the risk of his investment decisions. Accordingly, you should seek, if you consider appropriate, relevant independent professional advice on the investment considered. The analyses and comments presented do not include any consideration of your personal investment objectives, financial circumstances or needs. The content has not been prepared in accordance with the legal requirements for financial analyses and must therefore be viewed by the reader as marketing information. JFD prohibits the duplication or publication without explicit approval.
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 76% of retail investor accounts lose money when trading CFDs with the Company. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. Please read the full Risk Disclosure.
Copyright 2020 JFD Group Ltd.